The gist: MF Global is the clearing firm for a huge chunk of the traders on the floor of the exchange. That means, essentially, that they guarantee that all trades get paid out, a role that the Chicago Board of Trade used to play directly, but which was outsourced to third parties as part of the CBOT's move towards being publicly held. Importantly, MF is/was the clearing firm for many sub-firms, which means that many traders ultimately were having their trades cleared through MF Global, even if they didn't know it.

ANYONE who somehow has their trades cleared through them was unable to trade today, and that means that any trader who had open positions is just sitting there watching the market move, while they find a new firm.

Theoretically this shouldn't take too long, in some cases traders could be back up and running tomorrow if the paperwork of going to a new firm can be done fast enough.

Bottom line though: The screwup that caused the big disruption was not necessarily the collapse of MF Global itself, but the fact that many firms that dealt with MF Global assumed that everything would be fine, like it would have been when the CBOT was a partnership.

Here are some quotes from Wilkinson

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"Basically ... all this stuff started accumulating on Wednesday. A lot of these clearing firms had a chance to make a lot of moves. But people thought it was like the REFCO situation and there weren't going to be a lot of problems."

"(Today) I got on the floor early ... before they started shutting off everyone's access."

"People who have huge positions. They must be pulling their hair out."

As for traders siwtching to new firms ... "They have to sign some release agreements ... it shouldn't be much of a deal. They'll be up late at night."

"They could've done something. When they saw that MF Global's stock was going to 40 cents on Friday, a lot of these clearing firms should have been on the ball. They were old school, and thought that it would be seemless."